MG Motor under Ministry of Corporate Affairs scrutiny over booked losses
Chinese automaker MG Motor India has been served a notice by the Ministry of Corporate Affairs (MCA) over its books of account and losses it made in the first year of operations.
Published: 02nd November 2022 08:25 AM | Last Updated: 02nd November 2022 08:25 AM | A+A A-
NEW DELHI: Chinese automaker MG Motor India has been served a notice by the Ministry of Corporate Affairs (MCA) over its books of account and losses it made in the first year of operations. The Registrar of Companies (RoC) has summoned the management and the auditor of the company to explain some of the accounting issues identified by it.
Deloitte is the auditor of MG Motor India, a subsidiary of China’s SAIC Motor. MG Motor in a statement on Tuesday confirmed that it has been sent a notice seeking clarifications primarily on why it had operational losses in the first year of operations in 2019-2020.
The company said it is cooperating with the authorities on all issues and is in process of providing the desired records and information to the RoC within stipulated time frame. “MG Motor India is a law-abiding, professionally managed company that adheres to the highest standards of compliance and governance and is committed to transparency,” it said.
The company said it is impossible for any automobile company to be profitable in the first year of its operations. “This is because of the huge Capex investment required and the long gestation period in a highly competitive market such as India where many multinationals have struggled for decades and have accumulated losses,” the company said in a statement.